The Competitive Edge: Offer a 401(k)

A 401(k) is a provision within a qualified defined contribution plan that allows employees to defer a portion of their salary to fund their retirement. Since its introduction in the mid-1970s, the 401(k) has become the most popular retirement plan due to its affordability and flexibility. Unlike pension plans, 401(k)s are primarily employee-funded, with participants bearing the investment risk, making them responsible for securing their own financial future.

Today’s top talent understands their value, and a robust benefits package plays a crucial role in their decision-making process when choosing an employer. Offering a 401(k) plan demonstrates that you care about your employees’ well-being—not only during their working years but also into retirement. Beyond enhancing employee satisfaction, a 401(k) can provide your business with a strategic advantage in attracting top talent, reducing turnover, and potentially offering significant tax benefits.

Ways a 401(k) Strengthens Your Company

Attract Top Talent

  • Stand Out in a Competitive Market: Skilled workers are in high demand. Offering an employer sponsored retirement plan helps you compete for the best candidates.
  • Meet Evolving Expectations: Younger generations prioritize financial security. A 401(k) positions you as a forward-thinking employer.
  • Enhance Your Brand: Sponsoring a 401(k) reinforces your reputation as a company that values its people, making you more attractive to potential hires.

Reap Potential Tax Rewards

  • Tax-Deductible Contributions: Employer contributions to a 401(k) may be tax-deductible, potentially reducing your business’s tax burden.
  • Multiple Tax Credits: Several credits are available to incentivize businesses to offer retirement plans, including:

–Startup Cost Credit: Available for up to three years to offset plan setup costs.

–Design, Administration, and Employee Education Credit: Available for businesses with 100 or fewer employees.

–Automatic Enrollment Credit: Additional credits for up to three years for plans with this feature.

–Tax Credit for Employer Contributions: Get credits on your contributions to Plan Participants.

Learn More About 401(k) Contribution Limits

Retirement plan limits often change annually. Make sure you have up-to-date information. Review a chart of retirement plan limits among Ekon’s retirement plan resources.

Contribution Limits Chart

Choosing the Right 401(k) Options: Pre-Tax, Roth, or Both?

Designing an employer sponsored 401(k) plan that attracts and retains employees while aligning with your company’s goals requires thoughtful consideration of contribution types. Should you offer traditional pre-tax, Roth, or both? Many companies choose to provide both pre-tax and Roth options, giving employees more flexibility in their retirement planning. This can be particularly attractive to a diverse workforce with varying tax situations and goals.

A robust employer sponsored 401(k) plan is an investment in your most valuable asset – your employees. It helps attract top talent, boosts employee loyalty, and unlocks potential tax advantages.

Why Choose Ekon?

Traditional 401(k) providers often charge high fees and fall short on service. Online providers may leave participants and plan sponsors searching for help and a more personalized solution. At Ekon, we address common 401(k) plan challenges by helping employers meet their fiduciary responsibilities under ERISA and enhance the participant experience. Our transparent, affordable fee structure and dedicated plan specialists ensure top-tier service. Plus, Ekon clients gain access to our proprietary technology platform, which offers guidance, educational tools, and the ability for plan participants to track their 401(k) progress.

Ready to Invest in Your Workforce?

Future-proof your business with a well-designed 401(k) plan. Contact Ekon Benefits today to discuss your 401(k) plan needs and receive a personalized consultation. Let’s build a brighter future – together.

Make the Switch to Ekon Benefits

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